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European Commission to review US compliance package in the WTO Boeing case

The European Commission today confirms that it has received the compliance notice from the US in the WTO case DS 353, the so-called "Boeing case". "In March this year, the WTO ruled that billions of dollars of subsidies to Boeing were illegal, and the US were given until today to bring those to an end. We will now immediately review their compliance package to check whether the US have taken the necessary steps to end these subsidies and their adverse effects." said John Clancy, EU Trade spokesperson

Background

In March 2012, the WTO's Appellate Body rejected the US appeal and found that US Federal and State governments granted between US$ 5 and 6 billion WTO-incompatible subsidies to Boeing between 1989 and 2006. Subsidies to be granted after this date are estimated to be at least US$3.1 billion. The Appellate Body went even further than the previous WTO Panel ruling in supporting the EU's claims, notably by finding that the subsidies granted by the City of Wichita (Kansas) also flout WTO rules.

The Appellate Body DS 353 on Measures Affecting Trade in Large Civil Aircraft ("Boeing") confirmed several of the key findings of the Panel report that certain subsides to Boeing have damaged the interests of the EU and Airbus, notably:

Research and Development funding granted by NASA to Boeing - US$2.6 billion;

Research and Development funding granted by the US Department of Defence to Boeing - up to US$1.2 billion

Foreign Sales Corporation export subsidies – US$2.2 billion;

Washington State tax breaks to a value of close to US$3.1 billion for the period 2006-24.

The Appellate Body expanded the findings against the US by determining that US$476 million subsidies granted by the City of Wichita (Kansas) are also causing adverse effects.

On 23 March 2012, the Dispute Settlement Body of the WTO adopted the Appellate Body report, giving six months to the US to either withdraw these illegal subsidies or remover their adverse effects, in line with WTO law provisions, and notably the Subsidies and Countervailing Measures agreement.